Latest news with #EnergyCrisis
Telegraph
13 hours ago
- Business
- Telegraph
Prepare for a Middle Eastern energy storm
Oil, currency and equity markets are treating all-out war between Israel and the Iranian regime almost as if it were a routine and contained Middle East spat, likely to blow over as so often before. It is nothing of the sort. Israel's Benjamin Netanyahu aims to overthrow Iran's clerical-military regime and talks openly of liquidating the supreme leader, Ayatollah Ali Khamenei. This is a fight to the death. There is a very high risk that the US, Britain, and France will be drawn directly into the conflict – pitting the democracies against the coalescing confederacy of Iran, China, Russia and North Korea, and its disturbingly large tail of semi-aligned states. The hybrid struggle between two rival blocs resembles the treacherous landscape before the Thirty Years War in 1618, and the First World War in 1914. All it takes is hubris and a few more errors to set off this slow-burning fuse. Brent crude prices have already slipped back to $74 a barrel as I write. The market is in steep 'backwardation'. Futures contracts for autumn were trading near $66 on Tuesday morning – far below the average range over the last 20 years in real terms. Investors are implicitly betting that neither side will up the ante and attack tankers or export terminals in a region that supplies 18pc of the world's oil and 20pc of its liquefied natural gas (LNG). The logic of this conflict may force both to do exactly that. 'Energy is now clearly in the crosshairs,' said Helima Croft, commodity chief at RBC Capital Markets and a former oil analyst for the CIA. Israel has so far restricted its attacks to energy targets that hurt Iran's domestic economy. It has bombed oil and fuel depots in Tehran, and hit refineries in the South Pars gas field. It has not yet targeted the vast oil terminal at Kharg Island, which accounts for 90pc of Iran's crude exports and essentially funds the clerico-military regime. Ms Croft sees a clear and rising risk that Israel will cross this line, setting off a perilous chain reaction. You could read market insouciance as evidence that oil no longer matters as much as we used to think. The 'oil intensity' of global GDP has fallen by 60pc since the energy crisis of the 1970s.
The Guardian
10-06-2025
- Business
- The Guardian
EU to propose lowering price cap on Russian oil in new sanctions package
The EU executive is to propose lowering the price cap on Russian oil as it seeks to tighten energy and financial sanctions targeting the Kremlin's ability to wage war. The president of the European Commission, Ursula von der Leyen is expected to put forward a plan on Tuesday to reduce the price at which Russian oil can be sold from $60 (£44)a barrel to $45, according to an internal document. The $60 price cap was agreed through the G7 in December 2022 with the aim of reducing Russia's revenues from fossil fuels. G7 leaders are due to meet next week in Canada. The commission will also propose tightening up measures against the 'shadow fleet', hundreds of old and poorly maintained tankers that enable Russia to export oil to countries such as India at a price above the western-imposed cap. For the first time EU sanctions are targeted against the captain of a shadow fleet tanker, an Indian national. Officials hope this will have a chilling effect, discouraging others from crewing these vessels that fly under a flag of convenience. The commission also proposes listing 70 more shadow fleet vessels on its sanctions list, bringing the total under designation to more than 400. One EU diplomat estimated last month that the fleet now stood at about 800 tankers, up from just 100 two years ago. The measures trailed by von der Leyen also include restrictions on doing business with the companies running the Nord Stream 1 and Nord Stream 2 pipelines. Nord Stream 1 was rendered unusable after a series of underwater blasts for which no one has ever claimed responsibility; Nord Stream 2 never received a licence. But Russia has expressed interest in reviving the gas projects connecting Russia and Germany. EU officials say they wish to dissuade investors from getting involved. The latest proposals, which would have to be agreed unanimously by the EU's 27 member states, would also impose restrictions on doing business with 22 banks, cutting them off from the Swift financial messaging system. The commission last week promised 'hard-biting' measures in its 18th round of restrictive measures against Russia, after von der Leyen met the US senator Lindsey Graham. The Republican senator is the author of what he says is a bill that would impose 'bone-breaking sanctions' on Vladimir Putin including a 500% tariff on goods from countries importing Russian oil. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion In its account of the meeting last week, the commission said: 'We need a real ceasefire, we need Russia at the negotiating table, and we need to end this war. Pressure works, as the Kremlin understands nothing else.' European leaders last month vowed to impose 'massive' sanctions on Russia if Putin did not agree to a 30-day ceasefire within days.
